Separate pet deposit not in landlord’s best interest

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Q: I am a renter who recently vacated a rental property and I have an issue with the owner over a pet security deposit. When I moved in, the landlord required both a security deposit and a pet deposit. I recently moved out after several years and I am confused about these two deposits and the landlord’s ability to take funds from each deposit.

I thought both deposits were fully refundable, as there are no state or local laws that provide for nonrefundable security deposits. But my landlord thinks that he can charge for all damage beyond normal wear and tear, including some minor damage from my cat, against the regular security deposit and then simply not return my pet deposit. He says that it isn’t that the pet deposit is nonrefundable but that his policy is that the pet deposit is forfeited automatically. Also, there was nothing in the lease that led me to believe the pet deposit would not be returned subject to any damage specifically by my pet.

A: You are correct that the pet deposit should be refundable subject to any legitimate deductions for any damages or wear and tear that is excessive done by your pet. While there are some states that do allow for a nonrefundable deposit (cleaning, pets, etc.), they would have to be disclosed in advance in your lease or rental agreement.

I would suggest you write a letter to your landlord and point this out. You can get a copy of your state’s tenant-landlord security deposit laws online and attach a copy for your landlord’s benefit.

In my opinion, your landlord actually made more than one mistake. Not only did he attempt to take your pet deposit, but he didn’t protect himself as well as he should have when renting to a tenant with a pet.

I would advise landlords and property managers who rent to tenants with pets to increase the general security deposit by a reasonable amount and just have a single, larger security deposit rather than two separate deposits.

In your case, your pet caused less damage than the pet deposit, but many times you can find that the pet will cause more damage than the pet deposit and a landlord could be limited to charging for such damage against the pet deposit only. Then there are other circumstances where the pet doesn’t cause much damage but the human occupants or their guests do and the general security deposit is not sufficient to cover the damage.

You could actually have a situation in which the tenant is entitled to get some of the pet deposit back even though the general deposit was fully depleted and the tenant owes additional money for the damages beyond ordinary wear and tear. Now I understand that most landlords will simply just keep the pet deposit too, but that is technically a separate deposit and the tenant could challenge a landlord in small claims court.

So the solution when you are renting to tenants with pets is to always take the basic security deposit and whatever you intend to charge additionally as a pet deposit and combine them and increase your general security deposit to include all such deposits. The same logic can apply to other types of deposits that landlords may be allowed to charge in different jurisdictions unless the law specifically limits the ability to combine the deposits.

Q: I am renting out my personal home while I serve in the military overseas. I don’t want to come back to a home saturated and contaminated with smoke in the carpet and window coverings and walls, etc. I know that you have indicated in previous columns that landlords have the ability to offer their rental home as "nonsmoking." But does that mean I can restrict my potential rental applicants to only those prospects who are nonsmokers? In other words, is the fact that someone is a smoker automatically going to make them ineligible to rent from me if I have a "nonsmoking" rental unit?

A: That’s a great question. You should check with a fair housing attorney in your area, as the laws are very dynamic about the rights of landlords to restrict smoking in rental housing. But let me explain how I would suggest this should be handled absent any law to the contrary.

You and many other landlords have the same desire to rent their home or rental unit to individuals who will not smoke while inside. Some even want to restrict smoking outside in close proximity to the rental unit.

For many years now we have become accustomed to the restrictions on smoking in airplanes and now the same applies virtually everywhere for restaurants and in the workplace, too. I believe that you can make a condition of renting your home that no one will be allowed to smoke inside the home. However, I don’t think that you can refuse to rent to someone who smokes but agrees to not smoke inside your rental property or nearby if that is your specific rule.

In other words, a person who smokes can rent your home as long as he does not ever break your rules by smoking or allowing anyone else to smoke in violation of your rules.

You are probably familiar with many hotels that have very high financial penalties for people who break these rules. They will charge the occupant or renter all of the costs they incur to sanitize the unit and remove all the traces of smoke, or they may even have to replace some of the floor and wall and window coverings, which can be very expensive.

You probably would just prefer to say that all persons who smoke can be immediately disqualified, and there are some who will agree with you. The concern really is a fair housing issue in that you could possibly be found to be arbitrarily discriminating against someone by refusing to rent to him just because you don’t believe that he will honor your rules. Again, airlines and hotels have these same strict "no smoking" rules but they don’t refuse to serve customers who smoke. However, they do have nonsmoking rules that they will enforce.

So you can’t discriminate against a person as a "smoker" but you can have a rule that applies to everyone (smokers and nonsmokers) that smoking isn’t allowed either on portions of your property or the entire property. The key is that the behavior is regulated and not the person. Similarly, you should never say, "Children aren’t allowed to ride bikes or skateboards," but you can have a rule saying, "No bike or skateboard riding allowed on premises." The rule applies to everyone and is about a specific behavior.

This column on issues confronting tenants and landlords is written by property manager Robert Griswold, author of "Property Management for Dummies" and "Property Management Kit for Dummies" and co-author of "Real Estate Investing for Dummies."